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Will Nissan and Honda Merge?

Corporate mergers in Japan are different from anywhere else

DC Palter
Japonica Publication

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Photo by Kenjiro Yagi on Unsplash

I started my career many years ago working at General Motors. I soon escaped to Japan where I joined a Japanese automotive supplier followed by another stint at a GM subsidiary in Tokyo working on a collaboration with Toyota.

So when Nissan and Honda announced their discussions towards a possible merger this week, my reaction was quite different from the financial news and stock analysts who don’t understand that Japanese corporate mergers are nothing like those in the West. And nobody seems to be talking about the real story — Nissan’s desire to escape from Renault’s clutches.

Why Would Nissan and Honda Merge?

The impetus for Nissan and Honda to merge makes sense. The automotive market is transitioning from combustion engines (ICE) to electric vehicles (EV) and hybrids.

That may sound like swapping out one drive train for another — no big deal — but it changes everything. They look mostly similar, but inside, they are different machines.

A gas-powered vehicle is one of the most complex pieces of machinery ever invented, with about 30,000 separate parts, including 200 moving parts, that have to be separately manufactured, assembled, and maintained.

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